Calgary’s resale housing market had a record year in 2021 for MLS sales and so far this year the frenzied pace of activity is showing no signs of cooling down.
The incredible demand, combined with the continued low inventory of homes for sale in the market, has led to higher home prices at a time when interest rates are also rising.
While it’s becoming increasingly more challenging for people to buy a home these days — particularly first-time buyers — Calgary remains an affordable destination for homeownership in comparison to Vancouver and Toronto.
It’s a hot market that is showing no signs of slowing down
Tanya Eklund, a realtor with The Tanya Eklund Group and RE/MAX Real Estate (Central), doesn’t believe the recent increase in interest rates will slow down the market any time soon.
“It may affect the first-time homebuyers the most in maybe what they end up purchasing. Instead of a detached home, they may have to purchase a townhouse,” Eklund explains.
“Even though we are in low inventory, the last couple of weeks we’ve started to see a lot more inventory come to the market.”
Eklund says she recently read a report from one of the banks that they believe it’s still going to be a very strong market in the spring
“But maybe not this crazy frenzy we’ve been experiencing. As we see more inventory enter the market, they still expect it’s going to be a seller’s market — but it might calm down a little bit.”
Eklund says buyers must have their financing in order
Eklund encourages potential buyers to talk to their banks to see if they need a financing condition and get something in writing from the bank stating they are not subject to financing if that is the case.
“If you have a financing condition and there are 16 other offers, you’re not going to stand a chance,” she says in regards to buyers that enter into a bidding war.
If you’re buying a condo, Eklund says to attain the required condo documents ahead of time. And for those buying a home, she says to discuss whether you want an inspection or not.
“If you’re not having an inspection, it’s called buyer beware. You have to beware of what might go wrong with this house and you have to take it as is,” she explains, adding many buyers are not prepared to write an unconditional offer.
“If people are really needing a home, we’re seeing these buyers having to make those decisions on whether they’re comfortable [with an unconditional offer].”
The current real estate market
After the first week of March, total MLS sales year-to-date are 6,286, which is more than 74% higher than the same period in 2021 which was a record-breaking year.
New listings have risen by more than 39% to 8,538. But the inventory of homes for sale as of March 7 was 3,920 which is off by 19% from a year ago.
The median sale price so far this year of $500,000 has risen by close to 15% year-over-year while the average MLS sale price of $533,068 is up by more than 10% from a year ago.
Ann-Marie Lurie, chief economist with the Calgary Real Estate Board, said this level of activity and price gains in the city’s housing market hasn’t been seen since about 2006. And some of the listing growth so far this year, particularly in February, has factored into continued sales growth.
The current housing market is a culmination of the perfect storm
Lurie says the city’s housing market has been buoyed by low-interest rates for quite some time now as well as an improving economy with more jobs being created.
“The demand continues to remain so strong in our market,” she adds.
“We still expect to see these tight conditions persist. It’s going to take some time for the supply levels to rebalance the demand. I think we’re going to continue to see further price gains as we move into the spring,” she says.
“The supply has always been a challenge in this market… It’s going to take some time to meet that demand.”
Tips for selling a home in this market
In this environment, Eklund says sellers should have their home prepared for sale, showing its best while being staged properly.
“We’re preparing our sellers for the pace. When your home gets listed, you have to be prepared that you might have 30 showing requests in two days . . . That may not be the case but be prepared to be out of your home for two to three days to let everybody in,” Eklund says.
“It is challenging getting people in these days. We’re seeing some showings where sellers are only allowing 30 minutes in a showing. That’s another thing you have to prepare your buyers for.”
It’s all about the right pricing
Eklund says pricing a home well is the best strategy for a seller because the market and the buyer will determine the home’s final sale price. And in this reality, there have been many cases of multiple offers in the market with homes selling for thousands of dollars above list price.
“Agents have to take the instruction of their sellers. So what we’re seeing is some sellers are listing on a Monday and saying all offers presented Thursday at three [o’clock],” she explains.
“But a ‘bully’ offer comes in on Wednesday for $80,000 over listing with no condition, that seller has the right to take that offer even though they said offers are presented Thursday,” Eklund adds.
“Realtors have to educate their buyers that ‘look it says they’re presenting at this time but if you’re really serious let’s put out a really high offer that they can’t refuse and maybe they’ll accept it.’”
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